Nikon Corporation has warned investors that an assessment of its metrology business based in Belgium is worth much less than originally thought, and that they should brace themselves for an extraordinary loss of 10,343 million yen (~$94M USD). Nikon Metrology NV is a subsidiary of Nikon Corp, and concentrates on measuring and inspection equipment, including microscopes and laser scanners.

In a statement released yesterday, the company said that after a review of the cash flow of the subsidiary as part of the company-wide restructuring plan, it was discovered that the value of the company’s investment in Nikon Metrology NV has ‘declined’—though the statement doesn’t specify by how much. It does say, however, that 10,343 million yen of the decline would be recorded as an "extraordinary loss" on the company accounts for the year ending March 2018.

There's no suggestion that these losses will have a direct impact on the company's imaging business, which is a separate subsidiary, but it can't be helpful to the corporation as a whole.

Press Release

The Announcement of Recognition of Extraordinary Loss in Separate Financial Statements

Nikon Corporation (hereafter referred to as “the Company”) expects to recognize a loss on valuation of the investments in subsidiaries as an extraordinary loss in its separate financial statements, which are prepared in accordance with Japanese GAAP, for the fiscal year ended March 31, 2018 as follows;

1. Contents of the Extraordinary Losses

As a part of the restructuring plan, the Company has strategically reviewed its
product portfolio to strengthen business efficiency through management decisions such as the business transfer of CMM business* in Nikon Metrology NV (hereafter referred to as “NMNV”), its subsidiary located in Belgium.

As a result of reviewing NMNV’s future cash flow in the aforementioned process, the fair value of the investment in NMNV has declined, and 10,343 million yen of the loss on valuation of the investment in subsidiaries is expected to be recorded as an extraordinary loss based on Japanese GAAP.

*CMM Business: Development, manufacture, sales, and service of Coordinate Measuring Machines 2

Impact on Consolidated Performance

The valuation loss is expected to be reflected as an extraordinary loss in the Company’s separate financial statements under Japanese GAAP.

There is no impact on the consolidated performance, as the loss on valuation of the investment in subsidiaries is eliminated on the consolidated accounts.